The New York Times

Tuesday, April 18, 2000

Learning to Love the IMF

By E.M. BROWN

LAREDO, Tex. -- I recognize the people who have been getting tear-gassed in Washington the last few days. I recognize their Birkenstocks and tie-dye shirts and their idealistic rhetoric. Seven years ago, as an idealistic Ivy League undergraduate, I, too, was a radical. And while I know these protesters are well-intentioned, I also think they are wrong.

My childhood in Jamaica in the 1970's and 80's stoked resentments in me about the International Monetary Fund. Every so often, our talk shows lit up with speculation over whether we were going to "fail" an upcoming I.M.F. test. Few Jamaicans have formal education in economics, yet everyone understood the consequences of failing an I.M.F. test: A team of Washington-based economists would swoop in to impose stringent austerity policies and to cut back our already frayed social safety net. More beggars would appear on our streets; crime would inevitably rise. Social unrest would predictably follow.

I think that the fund's policies caused much damage to Jamaica's democracy -- in part because the ensuing hardships sustained inept politicians who could use the fund as a scapegoat to deflect attention from their own economic mismanagement. Essentially, we felt we were not masters of our own destiny simply because we were poor.

Yet what I did not know as a young girl, and what the Washington protesters do not recognize today, is that the picture is substantially more complicated. For all its shortcomings, the I.M.F. helped to democratize capitalism in Jamaica. The best thing the fund ever did for Jamaica was to force globalization (yes, the dreaded G word!) down our throats. Although it is arguable that some austerity measures were too stringent, the fund forced us to privatize some industries and, more important, to lower tariffs and to drop many of the arcane regulations that had long hampered importing and exporting in our island economy.

Opening the borders gave working class Jamaicans the opportunity to become entrepreneurs in a system that had long been clogged by bureaucratic red tape and nepotism. Thirty years ago, the majority of the country's wealth was owned by only a couple of dozen families. These families had preferential access to import-export licenses, and price collusion was rampant. This affected not only our wallets but also our entire culture. The corrupt system quashed the entrepreneurial spirit of the public. Essentially, working-class Jamaicans knew their place: They could maybe become teachers and farmers and policemen, but they could not run businesses.

The relaxation of trade rules was a vital part of a process in which everything became fair game. To some extent, any young entrepreneur with enough initiative and some start-up capital could start an import-export business. The more ambitious among our working classes took the opportunity: taxi drivers started to import their own cars; reggae singers could import the recording equipment needed to launch their own careers.

Of course, many members of this new middle class are only one paycheck away from economic hardship. Start-up capital remains hard to come by. Some barriers to trade remain. In the mid-90's, a leftist Jamaican government severed ties with the I.M.F., and the national debt has soared from less than $5 billion to nearly $10 billion (or 150 percent of gross domestic product) in the last 5 years.

But despite these setbacks, the cultural changes brought by democratized capitalism have been resilient. On a recent airplane flight to Jamaica, I sat next to a woman who was an informal commercial importer, or "higgler" in Jamaican parlance.

She had been a housekeeper to a wealthy Jamaican family, but had long dreamed of starting a dress shop. She borrowed start-up capital from an aunt in New York, and now she runs a boutique out of her home in Jamaica, selling clothes and makeup from an American discount chain to other aspiring members of the Jamaican middle class. She is an unabashed social climber; she told me she had her eye on a house in her former employer's neighborhood. She is living proof that the new capitalists no longer know their place.

Some members of the Jamaican political and economic elite like to say that democratized capitalism would have happened in the country in any event, that sooner or later we would have had the foresight to abandon our tariffs and open our borders. Perhaps. But I doubt we would have had the political will. For that, we have to thank the "tyrants" at the I.M.F.

This is why I am not at the protests in Washington this week. Fellow radicals, take note.

E.M. Brown is a lawyer.